Statutory Demands in Scotland

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Statutory Demands in personal insolvency

In personal insolvency cases, if a creditor wishes to petition the court for sequestration (bankruptcy), the use of a statutory demand can form the basis for establishing ‘apparent insolvency’. The creditor must be owed a debt of at least £1,500 to serve a demand.

 

The statutory demand should be served on the individual personally by sheriff officers (which can include post box service by them, by their confirming that inquiries have been made and that they are satisfied that the debtor lives at that address). The individual then has a 21-day period to deal with the demand. If the debt is disputed, the individual must return the denial slip, which forms part of the statutory demand form to the creditor.

 

The statutory demand in personal insolvency cases is a prescribed form known as Form 5 (provided for by section 16 (1) (i) of the Bankruptcy (Scotland) Act 2016.

 

If the debtor returns a denial slip and denies/disputes the debt, the creditor cannot then proceed to petition for sequestration on the basis of the Demand.

 

Bankruptcy (Scotland) Act 2016

WWW.LEGISLATION.GOV.UK

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An Act of the Scottish Parliament to consolidate the Bankruptcy (Scotland) Act 1985, the Bankruptcy (Scotland) Act 1993, Part 1 of the Bankruptcy and...